Government agencies are no model act inquiry told

Civil liberty and legal groups have thrown their support behind a push to make powerful government agencies, such as the Australian Taxation Office (ATO) and the Department of Human Services (DHS), more accountable under their responsibilities to act as model litigants.

Government agencies are required by law to act as model litigants in legal disputes but critics claim proving breaches is difficult, and so legislative changes have been proposed by Liberal Democrats Senator David Leyonhjelm.

The new laws would see the Commonwealth Ombudsman handed the power to investigate and rule on whether agencies had acted unreasonably.

Senator David Leyonhjelm.

Photo: Peter Rae

Civil liberties and some legal groups have voiced their support in submissions to a Senate inquiry, which is due to hold its first public hearing on Thursday.

But large government agencies including the ATO and DHS have warned the same inquiry that the changes could encourage bogus litigation while the Ombudsman cautioned the additional responsibilities would need to be accompanied by significant new resources.

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Senator Leyonhjelm's Bill follows recommendations from a 2014 Productivity Commission inquiry that suggested governments, their agencies and legal representatives should be subject to model litigant obligations that are monitored and enforced.

Currently the law does not give any enforceable rights or remedies to individuals. Model litigant obligations are only enforceable by, or on the application of, the Attorney-General, who may also impose sanctions.

Furthermore, non-compliance with the obligations cannot be raised in court proceedings except by, or on behalf of, the Commonwealth. That, some submissions note, means that even if there are identified breaches of the obligations during litigation, the courts are unable to impose sanctions.

The Bill suggests that if a breach of model ligitant obligations is found the "courts [should] be empowered to order a stay of proceedings and, if it is satisfied of a contravention, to make any order it considers appropriate".

Give citizens power

Civil Liberties Australia said it supported the Bill and allowing the Ombudsman to “ensure ordinary citizens have appropriate access to greater protection when dealing with the fiscal, legal and temporal might of the Commonwealth”.

It welcomed proposed annual reporting by the Ombudsman on breaches, saying current reporting by the Attorney-General's department was not occurring.

“Simply, if people are getting away with not obeying the rules, the numbers not obeying the rules will increase over time," it said.

The Australian Lawyers Alliance (ALA) said there is a clear need for greater oversight of government agencies. It said in relation to Comcare for example, model litigant obligations are rarely implemented.

“Comcare has employed what has been described as bullying tactics in demanding people pay back money that they had previously received as a part of their workers compensation claims," it said.

Boutique law firm Cleary Hoare Solicitors, which litigates on taxation matters, said the ATO was not behaving as a model litigant, citing an example of the agency attending compulsory mediation "with two lawyers and two ATO representatives against a self-represented litigant with a diagnosed mental health illness".

The Law Council of Australia said it wants to see agencies comply with model litigant obligations, but it did not support the proposed amendments as an effective way of achieving this.

Commonwealth Ombudsman Michael Manthorpe said if the Bill was implemented his office would need extra resources and would need to hire specially-trained investigation officers who understand litigation.

In order to appropriately investigate a complaint the Ombudsman’s office may need to speak to lawyers and witnesses involved in the case.

“That could inadvertently interfere with the conduct of the proceedings,” his submission warned.

ATO worries about revenue impact

The ATO's submission warned the laws would limit its revenue-raising capabilities saying debt recovery and enforcement could be "delayed, frustrated, significantly impeded or avoided” and “egregious and vexatious litigants" could delay proceedings.

The ATO said that from "several thousand litigation matters commenced or received each year" there were 14 "reported" breaches of the model litigation obligations investigated and finalised in 2016-17, which resulted in two confirmed breaches.

The ATO was also worried Commonwealth officers could face personal sanctions, which may create a culture of "risk aversion".

Photo: Fairfax

The ATO said it was also worried Commonwealth officers could face personal sanctions, which may create a culture of "risk aversion". The agency often uses external legal firms and counsel, who could also be held personally liable.

The Department of Human Services said while the Model Litigant Obligations serve a “clear public good”, it was also worried the laws may encourage “meritless or spurious allegations".

The Department of Home Affairs, which includes the Australian Federal Police, the Australian Criminal Intelligence Commission and the Australian Border Force, fears those in immigration detention or people on bridging visas seeking to stay in Australia may start litigation to prolong their stay.

This could delay proceedings and increase litigation costs, its submission said.

The Attorney-General's department was also against the Bill, saying there was not "any evidence of systemic issues with agency compliance".

The department, through the through Office of Legal Services Coordination (OLSC), in 2015-2016 received 49 notifications in relation to the model litigant obligation and 11 were identified as incidents of actual non-compliance.